The board of Vadhvan Port Project Ltd (VPPL) approved the proposed changes to the Hybrid Annuity Model (HAM), a public-private partnership model, in order to maximize the number of bidders for the proposed Vadhvan port project in Maharashtra. They also decided to reclaim approximately 1,200 hectares of land required for the port in two sections.
Following a meeting, the VPPL board members agreed to modify the Hybrid Annuity Model, which was initially implemented in 2016 to resurrect investments in India’s highway development sector. The modifications that have been accepted pertain to the payment term and structure.
For the implementation of the port project, a special purpose vehicle, VPPL, has been formed by JNPA and Maharashtra Maritime Board (MMB) with a shareholding of 74 per cent and 26 per cent, respectively.
These tweaks made to the HAM will be sent to the Union Ministry of Ports, Shipping and Waterways and later forwarded to the Public Private Partnership Appraisal Committee (PPPAC) for the necessary approval. “Once the PPPAC approves, we will immediately float the bids for the project,” said Wagh. VPPL plans to reclaim 1,227 hectares of land for the port and construction of an offshore protection bund at an estimated cost of ₹22,000 crore. The project will involve carrying out dredging of the approach channel, harbour basin, dredging of material for filling and reclamation of a total offshore area and maintenance of the developed area.
The VPPL board decided that the land reclamation will be done in two stages. Over the course of three years, 850 hectares will be reclaimed in Phase One, and an additional 350 hectares will be recovered in Phase Two. There will be a five-year construction period and a fifteen-year concession period, which includes the five-year construction period. 60% of the cost of reclaiming 850 hectares will be reimbursed to the private enterprise involved in the reclamation within the first three years, and 60% of the cost of reclaiming 350 hectares will be paid over the next two years. Within the next ten years, the remaining sum will be paid.
These tweaks were incorporated after 10-odd entities participated in an EOI floated for the project by JNPA and shared inputs. The companies who participated in EOI include Adani Ports and Special Economic Zone (APSEZ), DP World, Royal Boskalis, Van Oord Dredging and Marine Contractors, Jan De Nul Dredging, among others.
The project will be financed by REC Ltd and Power Finance Corporation (PFC). The World Bank and JICA have also indicated interest in funding the project. The amount of money that will be required is unknown to us. The chairman stated, “The bid will determine whether we require funds.” JNPA would provide ₹7,000 crore as equity in the projects, while the Maharashtra government is anticipated to contribute an additional ₹3,000 crore.
